Price of Crude Oil Sets Another Record Before Retreating

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he price of crude oil reached a record $54.45 a barrel Tuesday in New York, before falling back nearly $2 by the end of the day, Bloomberg reported.

Crude, which has risen 23% since Sept. 8 on concern that lower U.S. production, caused by Hurricane Ivan, would limit available supplies for refiners, closed at $52.51 on Tuesday on the New York Mercantile Exchange.

Oil prices were up 64% from a year earlier.

In London, the November Brent crude-oil futures contract fell $1.06 to close at $49.60 a barrel on the International Petroleum Exchange. Brent oil reached $51.50, the highest intraday price since the contract began trading in 1988.

The Department of Energy said it would loan Premcor Inc., an oil refiner, 700,000 barrels of oil from the U.S. Strategic Petroleum Reserve to offset supplies lost from Ivan. It was the sixth loan since the storm struck.

Premcor was awarded a 500,000-barrel loan from the reserve last week. ConocoPhilips, Astra Oil, a unit of Royal Dutch/Shell Group and Placid Refining Co. LLC have also received loans.

Also Tuesday, the International Energy Agency said Tuesday world oil use would jump by 2.71 million barrels a day to 82.4 million barrels a day this year, up 190,000 barrels a day from an earlier prediction.

It also said it was cutting its forecast for 2005 demand growth because oil prices would restrain the economy.